UPDATE: EU Reaches Deal on Historic AI Act

UPDATE: On Dec. 8, the European Parliament and the bloc's 27-member nations finally agreed on the rules for what would be the world's first comprehensive regulations governing AI.

They overcame disagreements over controversial parts of the Act, including the use of facial recognition systems by law enforcement and how to regulate generative AI.

"Historic!" tweeted Thierry Breton, the EU’s Internal Market Commissioner. "The EU becomes the very first continent to set clear rules for the use of AI. The AI Act is much more than a rulebook - it's a launchpad for EU startups and researchers to lead in the global AI race."

The Act does allow - but limit - biometric identification systems used by police and bans social scoring using AI to manipulate or exploit user vulnerabilities. It also gives consumers the right to file complaints and get back "meaningful" explanations, among other provisions.

Violations of the Act range from €35 million ($38 million) or 7% of global revenue to €7.5 million ($8 million) to 1.5% of revenue.

"MEPs (members of the European Parliament) reached a political with the Council (of Europe) on a bill to ensure AI in Europe is safe, respects fundamental rights and democracy, while businesses can thrive and expand," the European Parliament said in a statement. "This regulation aims to ensure that fundamental rights, democracy, the rule of law and environmental sustainability are protected from high risk AI, while boosting innovation and making Europe a leader in the field. The rules establish obligations for AI based on its potential risks and level of impact."

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What is left is the formal vote by the European Parliament, largely seen as a formality that is expected to come early next year.

Yann LeCun, Meta's chief AI scientist and a strong proponent of open-source models, tweeted a "kudos" to the French, German and Italian governments for "not giving up on open source models." The Act provided broad exemptions to open-source models.

Amanda Brock, CEO of OpenUK, was cautiously optimistic. Citing early reports of the draft legislation, which are not yet publicly available, she said that nonprofit organizations that "sell" open-source software but reinvest the proceeds in not-for-profit activities are exempt from the rules. "If this is indeed true that will be a significant victory for the open source communities," she said in emailed comments to AI Business.

Hours leading up to the agreement

Lawmakers had continued negotiating even as the Dec. 6 deadline to finalize the EU AI Act came and went.

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Among the key sticking points are governing generative AI systems, like ChatGPT, and the use of AI in biometric surveillance systems, according to Reuters. Some 20 hours of continuous debate took place before getting to these major sticking points, with a Council of the European Union press conference due to take place on Dec. 7 postponed as negotiations continue.

This led Thierry Breton, the EU’s Internal Market Commissioner, to post on X (Twitter): “New day, same trilogue.”

After the European Parliament signed off on its position on the AI Act in June, member states and lawmakers have tried for months to get the legislation over the line.

The legislation would introduce a rules-based system that would categorize all AI systems based on their potential to impact citizen’s rights. Those more likely to impede civil liberties would be subject to strict rules or could be outright banned.

The prospective AI Act would class biometric identification systems as ‘high-risk’ and would ban their use by law enforcement in publicly accessible spaces. However, some member states are unhappy, wanting exceptions for national security and military uses.

Parliamentarians introduced new rules on foundation models such as GPT-4 and Gemini this past summer but France, Germany and Italy wanted a late addition offering self-regulation for generative AI systems.

The Dec. 6 deadline to finalize the legislation marks exactly one year since the Council of the EU adopted its position on the bill.

This article was updated to reflect that an agreement over the AI Act.